Here's Why Skillz Stock Suddenly Spiked Today

Motley Fool2021-08-31
Someone just made a multimillion-dollar bet on this company.

What happened

Shares of mobile-gaming platform Skillz Inc were trading modestly higher for most of Tuesday's session. But around 1:30 p.m. EDT, the stock suddenly spiked higher, seemingly out of nowhere. As of this writing, the stock is up 12%. After a little digging, it seems that some chatter on social news platform Reddit could be responsible for the jump.

So what

A Reddit user posted that they had purchased $4.8 million in Skillz stock. Normally, I'd be reluctant to mention something like this. But there's no other news from Skillz today. Moreover, the time of the Reddit post roughly corresponds to the jump in Skillz stock. Therefore, this possibility can't be dismissed.

To be clear, one Reddit user likely can't move Skillz stock this much on their own. But as we've seen with other stocks in 2021, a strong vote of confidence on Reddit can inspire many other investors to also purchase shares. And this combined effort can cause a stock to make moves.

Now what

Wondering if you should join the new wave of Skillz investors? I'll leave you with two thoughts. First, I wouldn't recommend ever buying or selling a stock based solely on what someone else is doing. At a minimum, you should know what the company does, and you should have a basic understanding of how its business model can create shareholder value over time.

Second, remember that not everyone is playing the same game when it comes to the stock market. Someone might make a multimillion-dollar bet, but you don't know their personal financial situation or how long they plan to hold. When it comes to my approach, I'm interested in building adiversified portfolioof stocks that Ihold for many years. This strategy allows me to take advantage of the stock market's upward bias over time and also compensates for my own fallibility. This is the game I think other investors should be playing too.

For the record, I'm a satisfied Skillz shareholder, and I believe it'sa company you should get to know. That said, I'd suggest investorsnotmake rash buying decisions based on social media hype. If Skillz is a great long-term opportunity, it will still be there afteryou've done some research.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • 785bfcf1
    2021-09-03
    785bfcf1
    Study's speed should be faster than up and down candlesticks
  • karen521818
    2021-09-01
    karen521818
    Ok i buy 
  • xiaochan
    2021-09-01
    xiaochan
     [Miser] 
  • xiaochan
    2021-09-01
    xiaochan
    Good!
  • SquareGuy
    2021-09-01
    SquareGuy
    Condemned to max.  When u chased, 7 die!
  • Hb_
    2021-09-01
    Hb_
    ???
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